Trading Plan for July 7, 2011

Current Long Positions (stop-losses in parentheses): SPY July 130 Puts

Current Short Positions (stop-losses in parentheses): STNG (10.39)

BIAS: 5% Short

Economic Reports Due Out (Times are EST): ADP Employment Report (8:15am), Jobless Claims (8:30am), Bloomberg Consumer Comfort Index (9:45am), EIA Natural Gas Report (10:30am), EIA Petroleum Status Report (11am)

My Observations and What to Expect:

• Futures are up nearly 1% heading into the open after positive ADP Employment Report. 
• Asia was mixed/flat in trading while Europe is up about 0.7%. 
• S&P is bull-flagging and consolidating some over the last two days which is helping to support today’s move higher in the pre-market. 
• A move above 1345 would break through the last remaining resistance between current price and new recovery highs. 
• While we could continue to rip higher in the short-term, the market is getting somewhat ahead of itself and definitely parabolic which can lead to highly volatile pullbacks in the market. 
• On market opens like what we are seeing today, be careful that you don’t jump and chase after the market too soon, even with day-trades, because the potential is there to see a gap fill after an impressive open. 
• We are still hitting the upper bollinger band, and closed just a shade inside of it. 
• Volume has been light this week, and last week. 
• Shortened holiday weeks can often prove to be a challenge when it comes to trading.
• My Conclusion: Similar consolidation over the last two days that we saw back in March, which led me to close out my puts yesterday, in anticipation of another move higher like we are seeing today. 

Here Are The Actions I Will Be Taking:

• Will continue to day-trade the market with my focus being on small-cap stocks.
• Closed out my puts in SPY yesterday at $0.28.
• Follow me in the SharePlanner Chat-Room today for all my live trades and ideas (as well as everyone else’s).